“The combination of the Controlled Substances Act and state-level legalization creates a conflict: The states are licensing individuals and firms to commit federal felonies.”

The top adviser in Washington’s effort to create a legal marijuana market was asked by the U.S. Senate Judiciary Committee to submit his thoughts on “Conflicts Between State and Federal Marijuana Laws.” The committee hearing started this morning at 11:30 (… you can watch the hearing by following the link above).

His response, frankly, is very informative and brings up ideas we’ve haven’t seen elsewhere in the discussion around this conflict between the feds and our new Initiative 502 pot market.

If you remember, the Department of Justice released a statement and guidelines in August for how its law enforcement officers and prosecutors around the nation are supposed to deal with legalization around the country. Basically, the DoJ will not sue to stop the creation of those markets but only if the states run a tight ship.

Here’s a few of the ideas sent to Congress by Mark Kleiman, leader of the team advising the Washington State Liquor Control Board on creation of a legal pot system – the entire document embedded below is well worth a read:

… the federal government could easily destroy the licensed, taxed, and regulated systems Colorado and Washington are now putting into place. But that would not mean that no one in those states would produce, sell, or consume marijuana: It would merely leave production and sale in the hands of unlicensed, untaxed, and unregulated illicit and quasi-medical producers and distributors. Would that really be a better result than is likely to emerge if the state-level experiments are allowed to run their course?

… On the other hand, simple deference to the states seems equally unwise. The CSA [Controlled Substance Act] remains the law of the land, and other states have a right to expect the federal government to ensure that decisions made in Washington and Colorado do not lead to a national flood of cheap, high-potency cannabis.

… The voters in Colorado and Washington State have created “alcohol-like” cannabis industries: competing for-profit firms acting under state regulation. There is reason to doubt that such a system is anywhere close to the ideal one. Whether the drug involved is cannabis or alcohol, commercial vendors have interests directly opposed to the public interest, because their most reliable and lucrative customers are precisely the minority of cannabis users or drinkers who have lost control over their consumption. The public interest is in allowing adult access to intoxicants for those who will use them moderately and responsibly. The commercial interest is in maximizing revenues and profit, which means creating and serving a market of people with substance abuse problems. The ability of regulators to rein in market excesses is limited by the Supreme Court’s “commercial free speech” jurisprudence. In what seems (to a non-lawyer) a complete absurdity, the court has held that Congress or a state legislature may ban an activity entirely, but may not allow it while banning its promotion.

There are at least two alternatives to commercial availability, short of complete prohibition. One would be to create a state monopoly on retail sales, as used to be the policy toward alcohol in many states. The other would be to allow production and sale on a strictly not-for-profit basis, exemplified by the Spanish “cannabis clubs” where users band together to hire people to produce cannabis for them, on the model of a consumer-owned organic farm.